Higher prices during energy crisis pushed energy efficiency, renewables in German businesses – analysis
Clean Energy Wire
Many German companies introduced energy efficiency measures and some shifted towards renewable power sources due to higher energy prices in the aftermath of the Russian invasion of Ukraine, found an analysis by research institute ZEW Mannheim. When energy prices increased between 2021 and 2022, companies also responded by reigning in their energy-intensive activities, for example by lowering production.
“From an energy and environmental policy point of view, our results suggest that a temporary energy price shock can be advantageous for a shift of energy use towards higher levels of energy efficiency and less consumption of fossil energies,” said the report.
However, the researchers cautioned that these positive environmental results come with negative short-term economic consequences. “Firms strongly affected by energy price increases show lower growth in sales.” Their products might be replaced by goods from businesses abroad, which are produced at a lower level of energy efficiency.
The report is based on data from the German Community Innovation Survey. Around 43 percent of companies surveyed replaced energy-intensive machinery with more efficient alternatives, which the analysis found promoted the substitution of fossil energy sources with renewables.
Other measures to adapt to the price hikes included a change of energy supplies, the use of digital technologies to reduce energy consumption and the introduction of energy management systems.
Another report published earlier this month found that the majority of large German companies were missing their own decarbonisation targets. German companies have also been found to be increasingly investing in climate adaptation measures like increased flood protections and new cooling systems for offices and factories.
